Opec+ JTC cuts 2022 crude surplus forecast: Update

Adds JTC inventory forecasts in paragraph four, Russian production in final paragraph

The Opec+ coalition has trimmed its forecast for this year's global crude supply surplus to 800,000 b/d, down by 200,000 b/d from its estimate at the end of June.

The previous forecast was itself a 400,000 b/d downward revision. Prior to that, the surplus estimate was 1.9mn b/d.

The Opec+ Joint Technical Committee (JTC) now views supply likely to outstrip demand by just 500,000 b/d in 2023, according to a document prepared for today's meeting.

The JTC's latest base case scenario for market developments assumes OECD commercial crude inventories of 151mn bl and 103mn bl under the 2015-19 average over the third and fourth quarters of this year, respectively, and then 18mn bl under the same metric by the end of 2023.

The JTC studies market conditions to inform Opec+ ministerial meetings. The Opec+ group meets on 3 August, where officials will try to pave a path for September output policy now it has fully unwound the production cuts it implemented during the Covid-19 pandemic.

Some delegates said Opec+ could choose to keep output steady, because of production capacity limits. Some large international consumers, notably the US, have repeatedly called for higher Opec+ production to alleviate the effects of sanctions against Russia. Moscow's production rose from 9.273mn b/d in May to 9.778mn b/d in June, sitting 885,000 b/d under the country's output quota for the month, the JTC report showed.

Opec+ achieves its production figure by averaging out the estimates of seven independent sources, including Argus.

By Ruxandra Iordache